| Community property that is held in joint tenancy WROS (in a community property state) gets special treatment. With most JTROS property, the 100% of the FMV is included in the decedents's tax estate, & the heirs receive a full step up in basis. With community property held as JTROS in comm prop states, only 1/2 the FMV of the asset is included in the decedent's tax estate, but the surviving spouse still gets a full step up in basis.
For 1st time home buyers, the tax advantage is that they can start itemizing their deductions and write off their property taxes, mortgage interest, charitable deductions, etc, instead of taking the standard deduction. They take all their points as a deduction during the first year if they can itemize; pro-rate the points over the life of the loan if they buy the house too late in the year to itemize. Also, other interest-charging debts can be folded into a home equity loan, and that interest is deductible (subject to a few limits). This allows a person to write off their car loan/credit card interest payments.
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This post does not constitute legal advice, nor does it create an attorney-client relationship. Postings are based only on the information provided and you should consult an attorney in your area before relying on information contained in this post.
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07-14-2003, 01:01 PM
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